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tv   Fareed Zakaria GPS  CNN  November 7, 2010 1:00pm-2:00pm EST

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through those runs. it is the only english he knows. ♪ return to sender ♪ address unknown >> we can report that three hours into the race, despite a knee injury suffered in the mine, pena has completed more than 19 miles. good for him. thanks for watching "state of the union." joe johns will be here next sunday morning while i'm on assignment for our prime-time special, "bush: two years later." until then, i'm candy crowley in washington, "fareed zakaria gps." this is "gps" the global public square. welcome to all of you in the united states and around the world. i'm fareed zakaria. the people have spoken, or at least 42% of registered voters have spoken, which is 90 million of america's 300 million people. the verdict is clear. the republicans have come to power. but whether they will be able to stay in power will surely depend
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on whether they're able to fulfill their central campaign promise, which is to cut down big government. i'm going to leave aside the question of whether cutting government and government spending is right thing for the economy now. we have a great debate on the very topic coming up. but i'm simply holding the republican party to its pledge. the reason i think this will be tough for them to stay politically popular, if they renege on this pledge, is because we've been here before. you see, this is actually the third republican revolution. the first was ronald reagan's when he came into office in 1980 and promised to cut taxes and cut spending. he did the first bit, enacting a massive reduction in taxes and closed hundreds of loopholes. it was a landmark piece of legislation. the problem is, he never got around to the second part. the result by 1985 is that the federal deficit as a percent of gdp had doubled. it only went down slightly after that because reagan agreed to
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several tax increases. but his budget director, david stockman, argued that the reagan revolution failed because of congressional republicans refused to cut spending. the second revolution was newt gingrich's. that was more successful, and gingrich deserves some credit. much of the credit, however, must go to the man who was president during those years, bill clinton. clinton's years in office saw the lowest average deficits in decades ending up with a massive surplus. and that is because he both raised taxes and cut spending. next up, the bush years. with republicans controlling all levers of government after 2002. an ideal time to fulfill the republican promise, to close the deficit, right? wrong. it turned out to be the most reckless expansion of government spending in two generations. the 2% budget surplus he inherited from clinton turned into 2% deficit. why? tax cuts, prescription drugs, and two wars, all unpaid for. the debt exploded. so this time, if the republicans look at the deficit and promise
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to close it, but then cut taxes and continue to expand spending, the public surely, at some point, will say, fool me three times, shame on me. anyway, there's more about this in my time magazine column this week, check it out on the newsstands or at time.com. today on the show, a great exclusive, paul krugman on the message from tuesday's election. voters said the economy was issue number one, so what needs to be done to fix it? and what will ever get done given the new balance of power? krugman is about as pessimistic as they come. he will joined by another great economist from the imf and university of chicago business school, yes, he leans somewhat to the right, raghuram, rajan. and then, what in the world? president medvedev takes a tour of a small island and causes a huge diplomatic dustup. all eyes on yemen after last week's attempted cargo bombing. is there any way to root out terror there?
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is yemen becoming the next afghanistan? we'll ask robert worth of the "new york times," who has reported extensively from that place. then, it's a majority muslim country, religiously conservative, that has rooted out terror and extremism? how? we'll ask malaysia's prime minister. finally, most americans probably dreaded setting back the clock today, but did they actually boost gdp in the process? we'll explain in the last look. let's get started. paul krugman wrote before the election that if republicans could take control of even one house of congress it would be "terrible." that's what happened on tuesday. how terrible will it be? "new york times" columnist, nobel prize winner, princeton
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professor, paul krugman joins me now, along with raghuram rajan. rajan, the chief economist of the imf, professor after the university school of chicago and last book "fault lines" won the "financial times'" business book of the year award. he and paul have sparred in blogs and essays, but i believe this is the first time that they will do so in person, if they do indeed spar. paul krugman, what is going to be so terrible about the republicans coming to power? >> mostly -- well, first of all, there's almost likely, certain, to be extreme clashes. i would put heavy odds on at least one government shutdown during the next two years. we're looking back fondly on statesmanship of newt gingrich. beyond that, it means no action. it means that we're probably going to see unemployment benefits, extended unemployment benefits expire, at exalt the moment that that will do the most harm. it means no chance of doing anything to tackle the economy's problems. so we're basically going to be
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herbert hoovering our economic policies at exactly the worst moment for the american public. >> do you think it's going to be terrible? >> i'm going to do a two-handed thing. it could be reasonably they come together and focus on both expenditure and tax reform, both are needed to put this economy back on the sustainable fiscal situation. i think gridlock with 10% budget deficits to gdp is a very bad idea. so if the outcome is gridlock, terrible. >> of course it's going to be gridlock. if you believe that the republicans and the democrats can come together, you must have been asleep for the last 20 years. >> no, no. it's a hope. i'm not saying it's a likelihood. i think it's a hope. >> it's a no chance-er. >> if you think it's no chance, i think we have serious problems. >> 10% budget deficit, 10% unemployment and 2% growth. the status quo is pretty unsustainable and you're going to get -- you're saying, kind of
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status quo government? >> exactly. >> you said, in one of your columns a couple weeks ago, that you thought obama was going to be blamed unfairly for having moved too far left, and the more accurate criticism would be that he didn't move left enough. i have to confess, this -- this line of argument puzzles me because liberals turned out and he got 95% of the vote. the big difference was a lot more conservatives turned out, a lot more republicans turned out and independents crucially broke and went and voted for republicans. >> i wouldn't -- i don't think i said that he didn't move left enough. i said that he didn't do enough. what he did, crucially, was settle for a really inadequate fiscal stimulus, take a relatively light touch on the banks, so he didn't do things the that might have produced a better economy. so i mean, overwhelmingly, the midterm was public disenchantment because unemployment is still close to 10%. he failed to deliver on jobs. no amount of positioning,
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appearing, sounding more conservative, whatever, could have changed that fact. what could have changed that fact would have been a stronger economic policy. maybe he couldn't have gotten it but the point was they played it safe, saying, well let's not push too hard on economic policy, got a weak economy, and got an electoral disaster. >> but you had exit polls showing people thinking that the government had basically gone too far left. it was doing too many things. voting sister conservative republican candidates. you're saying if they had regulated banks more these guys would have instead of voting for tea party candidates voted for them? >> people respond, whatever people say, what we know overwhelmingly from the political science studies is that it's the state of the economy, or more accurately, the trajectory of the economy in the year or so before an election that matters. if the economy had been -- you know, if unemployment had been falling. if unemployment has been 8.5 instead of 9.6 and falling, people would have had a very, very different view of what was happening. the notion -- i've been taught
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to be very cynical about this. the notion that people have a set of ideas about ideology, about what governments should do and they reward or punish governments on whether they actually follow that ideology is completely not true. people may say that, but what they actually do or how they vote is determined very much by the rate of economic growth in the couple of quarters before an election. >> so you know that the "wall street journal" editorial page is going to hear this and say, you see people like paul krugman just don't want to hear that the public rejected the obama agenda. >> well, you know, i don't think people like "the wall street journal" admitted in 2008 that the public rejected the bush agenda either. what happened was, this was an unsuccessful economic policy. we can argue that it was successful in avoiding things that are even worse, but you have to deliver -- for political purposes, you have to deliver actual improvement, not failure of things to get even worse. and they didn't do that. and so, it was not an ideological referendum. if you actually asked, voters
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also thought that republicans are terrible. they hated both parties -- >> but they voted for republicans requerepublican s? >> they voted because they were protesting about the state of the country, which is a lousy employment picture. >> would you agree, that this is a failed economic policy? >> i wouldn't say failed. i would say it hasn't done enough on reviving the economy. and i would argue that some of the things needed to be done, spend political capital. and i think it expended far too much political capital on universal health care, which i think we need, but unfortunately that took time and energy off the things that need to be done. one, we got a banking sector, especially small and medium-sized banks, that don't have enough capital. they can't support a recovery when that happens and the lending needs to take place. two, we've got mortgages which are heavily under water, which need to be renegotiated. we need to spend political capital on creating a solution to that problem. and right now, there's no will to do that.
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a and third, i think we've created a lot of uncertainty in health care, in the financial sector with these new regulations. we need to make clear what those regulations will be. undoubtedly, there's a need for reform, but let's make clear so businesses no what they are, can then start going out and hiring. we've essentially created an overload of uncertainty on those areas of the economy, which are big, important, and i think more capital on those and less on health care might have been more effective. >> uncertainty. businessmen keep saying that it is the uncertainty that regulatory and tax uncertainty that causes them not to spend the almost $2 trillion that is on their balance sheets. >> you really need to be a little careful. business lobbyists say that uncertainty is the big issue. if you actually survey businesses and ask what's their problem, they say, it's inadequate sales. there's no good reason to believe that business investment is being held back because of uncertainty about the health care law, which actually, it's
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actually fairly clear what that is, or any of these things. what you have is in a depressed economy, with manufacturing operating not much more than 70% of capacity, with office buildings vacant, with malls vacant, why do businesses need to invest more? they already have more capacity than they need. so this is largely lly a canard. and the whole argument about political capital. lots of people say there was a failure to focus on the economy. but they almost never explain what it was that obama should have been doing. i actually view the whole focus argument as a piece of intellectual cowardice. it's a way to criticize the economic performance without actually saying what you would have done differently. >> let's just stick, though, with your main point, which is, this is the classic keynesian argument. you are in a moment where there is simply insufficient demand in the economy, consumers aren't spending, businesses aren't spending. the only entity -- the only player in the system that can produce demand is the
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government, so the government should be spending. what's wrong with that argument? >> what should the government do? can it do efficiently? can it do it effectively? we always have in mind large construction projects. we ever done that. we've run the gamut of large construction projects, which is beyond the envelope of the drawing. what do we do next? it takes time. and it's not probably going to be done in time for the recovery. so the real question is, what do you spend on? but this idea that there's somehow a button you can press and somehow the government will create spending that will revive the economy is a canard and something that is probably not wise. >> i've got to interrupt you guys. we're going to take a break and we'll come right back to have this discussion and this debate. right back. >> if we get a temporary extension of the high-end tax cuts, it would be hard to devise a less-efficient stimulus policy. this is almost guaranteed --
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this is giving money precisely to the people least likely to spend it. so it will worsen the federal budget outlook while delivering hardly any punch to the economy. what's around the corner is one of life's great questions. and while it can never be fully answered, it helps to have a financial partner like northern trust. by gaining a keen understanding of your financial needs, we're able to tailor a plan using a full suite... of sophisticated investment strategies and solutions. so whatever's around the corner can be faced with confidence. ♪ northern trust. look ahead with us at northerntrust.com. [ male announcer ] in the event of a collision, the smartest thing you could do is cut the fuel supply... ♪ ...unlock the doors, and turn on the hazard lights.
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my money. my choice. my meineke. and we are back with paul krugman from "the new york times" and princeton university and raghuram rajan from the university of chicago and before that, the imf. what i want to ask you, paul, aren't you going to get some of what you want? the republicans keep talking about tax cuts. no >> the problem with tax cut is that a temporary tax cut is likely to be saved, not spent. we know that. that's -- >> we've had three. >> in fact, that's milton friedman. milton friedman's theory of consumer behavior, is that temporary windfalls in the income are likely to be saved, not spent. and now, so can we do permanent tax cuts? well, we have this long-run budget problem.
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so if you ask, well, what are we going to do that would increase demand a lot? well, we could have big temporary tax cuts, but they're likely to be ineffective, or we can have somewhat smaller permanent tax cuts, but they're going to worsen the long-run budget outlook. add to that the reality that the republicans -- let's be realistically, politically, republicans are not going to say, let's strike a deal to revive the economy. we're going to take some tax cuts that last just a year or two. they're going to try to leverage their position into getting what they want, which is permanently lower taxes, which is going to be used to starve the beast in the out years. this is not going to work. this is going to actually worsen -- we do have, i'm not one of those people who says, there is no budget problem. there is a longer-run budget problem. look at the u.s. budget outlook for the year 2025 and it's not a pretty picture. so we cannot afford to do things that permanently worsen the u.s. budget position. and yet if we do things on the tax side that are only
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temporary, there -- it's not going to work. particularly, by the way, if it's tax cuts for the rich, which are the most able to smooth out their spending. so, you know, in the end, if republicans are willing to agree to something that is like a temporary payroll tax cut, it's not -- it's a pretty poor substitute for actually doing spending on infrastructure, but it may be better than nothing. if they want to do -- let's extend the bush tax cuts indefinitely, that's a policy to do very little in the short run and make the long run worse. what we're likely to get is some extension of the bush tax cuts, which, you know, what was at stake, always, was only the high-end tax cuts. so if we get a temporary extension of the high-end tax cuts, that's -- it would be hard to devise a less efficient stimulus policy. this is almost guaranteed. this is giving money precisely to the people least likely to spend it. so it will worsen the federal budget outlook whiledelivering
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hardly any punch to the economy. >> i assume that at least on that issue, you agree? that temporary extension of the bush tax cuts will probably not do much? >> probably not. i think it's a little problematic, raising taxes substantially. but in the medium term -- >> now you're talking like a keynesian. you can't have it both ways. >> no, no, i think we need to do things in the very short run which deal with some of the problems that paul is talking about. too many people are becoming long-term unemployable and what we need to do is move them back into the labor force. >> how do you do that fast? >> we need to focus on skill building. there are programs out there. many of them don't work. we need to pick the ones that work and try to work with them. but i think the real point this crisis is telling us is that america needs to shift. that america for too long has seen a deterioration in the underlying fundamentals of the economy. and in an attempt to paper over that, we've blown up the economy again and again, with monetary
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policy, perhaps with fiscal policy. at some point, we have to realize that the fundamentals aren't that good. too many people are falling behind. too many people don't have the skills and the education they need to compete in this world. but differently, i think the u.s. is a little bit like a car, with brakes sort of on and the malfunctioning is sort of got to get the brakes to work. in the meantime, what we're doing is we're trying to fill the engine with higher and higher octane fuel, in an attempt to get it to go faster, when, in fact, the brakes are well and firmly malfunctioning. let's remove those breaks, fix the underlying structure of problems, we will go faster. >> last word, paul krugman? >> time is not on our side. the longer this goes on, the more americans have been unemployed so long that they're no longer employable. we don't have, i believe, a lot of structural employment now, but give us two or three more years of this, and we will. the longer this goes on, the more we head towards a deflationary trap. look at u.s. inflation rates and japanese inflation rates from 20
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years earlier, and we're right on top of the japanese -- we're matching the japanese track exactly. and more deflation means that the debt burden gets worse. so we're actually in a situation where there are heavy costs being paid right now. we are not in a recovery in any sense that matters. but during the years of the bubble, there was a great overexpansion of indebtedness by parts of the population. and we cannot have a permanent recovery unless people get a chance to pay that down. and that's what booms do. booms -- we know that world war ii produced an economic recovery. why didn't the u.s. economy slide back into depression after the war was over? and the answer was that during the war, during the boom, the private sector greatly reduced its debt burden. that's what we need to do right now. of course, the point is, given the midterm elections, the next two years at a minimum are a wash. so none of this is going to happen. >> we'll have to leave it at that. thank you, paul krugman,
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now for ow "what in the world" segment. loyal viewers of this show will recall that a few weeks ago, i told you that world war i had just officially ended. well, it turns out that world war ii isn't fully over yet either. two of the combatants are still technically at war with each other and the cold war between them was ratcheted up this week with a high-level incident. it all goes back to 1945 when in the aftermath of world war ii the ex-soviet union annexed four japanese island. they're part of the kuril chain.
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the soviets already rolled 52 of the 56 islands and in 1945, stalin swiped up the four southernmost islands and the anger over the annexation meant that a formal peace treaty has never been signed between japan and russia. since then, teams at peace have come in fits and starts. in fact, just last month, the russian foreign ministry issued a statement that both japan and russia want a peace treaty. but then, this. on monday, russian president dmitry medvedev became the first russian or soviet leader to set foot on the disputed islands. he spent four hours on the islands, playing tourist, taking pictures, touring a geothermal station and a fish plant. he visited a family home, a church, and a food market. medvedev also reportedly promised the people on the island of kunshir he would get them more cable tv channels.
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but that four-hour tour set off a firestorm. japan quickly recalled its ambassador to russia. before he went there, medvedev had been warned by the japanese that such a trip would have, quote, a grave impact on bilateral relations, end quote. medvedev's response to those ominous words -- i will definitely go, then, in the near future. and when he did go there, he rubbed his ownership of the islands in japan's face, posting a picture of the coastline on the web with a caption that read, "there are so many beautiful places in russia." get it! and to make matters worse, russia's foreign minister responded to the japanese alarm by saying that the president had enjoyed his visit to the island so much, that he planned to go back. meanwhile, japan is also embryoed in a territorial conflict with its other big neighbor, china. this dispute is over a set of islands in the east china seas. due to the ongoing spat, china
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canceled a an official meeting between its premier, wen jiabao. is there a broader point to make about all these squabbles? yes, nationalism lives in asia. we sometimes think we're in a world in which countries will be reasonable and rational and make compromises on their narrow national interest s for the common good. sometimes. but asian countries, particularly large asian countries, remain very traditional nation states with a strong sense of nationalism. each of these countries feels very strongly about its rights to these disputed territories. for instance, 80% of russians say the motherland should hold on to the four islands, so medvedev was certainly playing to the electorate that he will presumably face in 2012. are the other leaders playing to their hometown crowds as well? this whole story, as well, is about asia's new power
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struggles. china is the nation's obvious power broker, but russia wants to be left out of the equation. the unspoken force in the region is not from the region. it is, of course, the united states. we will be right back. very, very poor governance, you have a state that is running out of oil. a country that is actually running out of water. it could be one of the first world capitals to run entirely out of water. all of this makes it incredibly hard to make progress against any kind of insurgency. was gathered together in one place. [ printer whirs ] done. ♪ thanks. do you work here? not yet. from tax info to debunking myths, the field guide to evolving your workforce has everything you need. download it now at thinkbeyondthelabel.com.
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i pull up a nice cozy chair and go through it. see, every year during open enrollment we can make changes to our medicare. while we always have our guaranteed benefits, there are other choices to think about each year. and, with the new healthcare law, we have lower costs, free check-ups and screenings. it's worth looking into. ♪ is yemen the next afghanistan? it's a question that has come up frequently in the wake of last week's attempted cargo bombings. yemen is a country in the middle of not one but two civil wars and now the world is asking it to fight a war on terror. can can it do that and why is al qaeda there anyway?
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with me now, robert worth, he had a cover story on just this question in "the new york times" magazine. he joins me now from beirut, where he's based. welcome. >> thank you. good to be here. >> so, why are we hearing about yemen? all of a sudden, we'd heard about al qaeda in afghanistan, pakistan, in somalia. now yemen. why has it moved to yemen or why has al qaeda sprouted up in yemen item >> well, al qaeda has been in yemen for a long time. i think the reason we're hearing about it is is it now attacking -- aiming attacks at the united states. it's hard to know whether these attacks on the u.s. are just a way to attract publicity or whether they have, in fact, decided that this is something that they really care about. as we all know, we've heard a lot about anwar awlaki, an american-born man, a preacher, very charismatic, who appears now to be part of al qaeda in yemen, and there's no question that he has extremely vengeful feelings towards the united states and toward the yemeni government and many, many people
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believe that he is part of -- he's behind these -- this new emphasis on the united states. >> the president of yemen effectively a military dictator, is he somebody who is now fully on board against this battle on al qaeda? in "the new york times" article, you describe a meeting with american officials who present him with evidence that al qaeda is attacking him personally, and you write then, that seems to have turned things around. and now the yemeni government is actually taking the fight to al qaeda. >> yeah, by, all accounts, that's true, and the president has taken this much more seriously. there's a lot more american military aid going to yemen. a lot more military advisers there. and they have, in fact, over the past year, not only have they allowed the united states to do air strikes in yemen, but the yemeni military and counterterrorism teams, some of them are very, very disciplined
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and good. they have carried out strikes not just in reaction to strikes, but have gone after them. >> the problem with the government deals in confronting al qaeda is that it has to extend its reach into the country in places it hasn't -- it has to perhaps confront tribes that it has never confronted before. it has always had this kind of more consensual arrangement with it. this sounds very familiar. it sounds a lot like afghanistan. and in fact, you know, the broader question i want to ask you is, it almost seems as though al qaeda goes into these kind of no man's lands, these ungovernable spaces with a lot of local tribal control, perhaps find a few tribes they're accommodating. and so we're, in the united states, always stuck in this position of, in order to battle al qaeda, you have to get the central government of this
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country to extend its reach, its legitimacy, and its control in a way that it hasn't for 2,000 years. is it possible to do it in yemen? >> it's very difficult. it's hard to say exactly what the right approach is. and the problem is, that as the u.s., you know, gets more militarily involved, again, they're not directly militarily involved but they've been provides lots more training and encouraging their yemeni partners to take a more act thetive military role. that runs a terrible risk, just as you say in pakistan and in afghanistan, of alienating the local people, who are intensive suspicious of any foreign intervention. and particularly in because of areas like that, where the intelligence is poor, terrain is hard to reach, and the tribes are powerful, you inevitably have some civilian casualties. one of the american air strikes last year killed quite a number of civilians, and it had a huge, huge effect in terms of protests. and the problem is, of course when you have already have a
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secessionist movement in the south and a rebellion in the north, discontent spreads. sort of hard to separate one issue from the other. there is not a broad ideological movement in yemen the way there is in afghanistan. there's no taliban. and that, i think, makes it a little bit easier, in a sense. on the other hand, you have all the other elements. you have very, very poor governance, a state running out of oil, a country that's actually running out of water. sanaa could be one of the first world capitals to run completely out of water. all of this makes it incredibly hard to make progress against any kind of insurgency. >> as you know, there's talk here about a drone attack on anwar awlaki, the american-born preacher who sort of inspired the nigerian underwear bomber and perhaps has been playing a more broad role in inciting anti-american jihad. what do you think will be the effect if there were a drone attack on awlaki. >> i think it would be very unpopular in yemen. i think anwar awlaki is mostly
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viewed as a charismatic preacher, and because he's not known to have actually killed anyone -- first of all, he's not that well known in yemen. he's more well known in the u.s. because of all of the media coverage here. i think it would be viewed as an attack on a someone who isn't necessarily guilty. yemenis are deeply, deeply skeptical of this kind of thing. so i think killing awlaki would have a lot of negative reaction, so there are some people who say the yemeni government doesn't want him to be found or killed, because they're nervous, understandably, about what would happen then. >> so if you were to rate the progress that the yemeni government with american assistance is making in defanging or defeating al qaeda in yemen, al qaeda in the arabian peninsula, what would you say? >> it's difficult to say whether they've made any progress. they've killed a lot of people but they do not seem to kill the groups' key leaders. we have no reason to think that -- i mean, we know anwar
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awlaki is out there, a very popular ideology. we have no reason to think any of the top leaders are dead. it only takes a few people to put together a letter bomb essentially that could have terrible, you know, global consequences on the economy. clearly, the number of people, the number of yemeni soldiers and police killed in the past few months suggests that al qaeda, if, indeed, it's responsible for all those killings, is, if anything, bigger than it was. so i can't say we've made visible progress. >> robert worth, pleasure to have you on. >> nice to be here. when we come back, you've just heard about a muslim country with a huge terrorism problem. in one moment a country that is virtually free of terrorism and extremism, and yet a conservative muslim society. is that a model for the muslim world? we'll tell you in a moment.
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hello, everyone. i'm fredricka whitfield at the cnn headquarters in atlanta. here's a quick look at the top stories. an endorsement for nancy pelosi from the man in charge of getting democrats elected in the house. he made his comment on cnn's "state of the union" this morning. >> look, on tuesday, this was a lot bigger than nancy pelosi. we lost over 607 state legislators. 19 state legislative bodies switched control from democrats to republicans. we lost a lot of governorships. what this was all about, and understandably so, was a referendum on 9.5% unemployment
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and a feeling that we had not made enough progress. all right. overseas, the president and mrs. obama spent some time with india's younger generation today. they visited local schools and a college on the second day of their visit to india. at one stop, they saw students performing dances to mark an indian religious holiday. the president joined in with a few steps and the students taught the first lady how to twirl a little bit as well. all right, tropical storm tomas is no longer a threat to land, but its effects could be felt for some time in haiti. the storm was a hurricane when it swept across haiti, killing at least six people. i'm fredricka whitfield, see you at the top of the hour in newsroom. right now, back to "fareed zakaria gps" in a moment. it's either pay their miles upcharges or connect through mooseneck! [ freezing ] i can't feel my feet. we switched to the venture card from capital one --
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we tend to think of conservative islam as equal to radical islam or violent islam. but i'm going to tell you about a muslim country that is conservative, religious, and yet peaceful and democratic. it has dealt so well with terror and extremism within its borders that it is now a model that other nations are trying to fall. the nation is malaysia. when secretary of state hillary clinton with was in its capita , this week, she embraced the prime minister's call to create a muslim nation worldwide. i talked to him about how his war on terror and america's were doing. >> mr. prime minister, pleasure to have you on. >> thank you. >> what do you think is the key to defeating the forces of extremism in an islamic society?
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>> i think there's several reasons why we've been able to overcome those extremists in our it so. first of all, if you look at the genesis of islam, how it came to our part of the world, traders from the middle east, and it was a peaceful conversion of the then-hindu king and the masses became muslim. islam has never really been associated with extremism and violence from day one. secondly, you know, over the years, you know, we've been able to bring about development and changes. in the '60s, poverty was more than 50%.
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but now in terms of poverty rate in malaysia, it's 3.6%. so you see the fruits of development actually lifting, you know, this tape of socioeconomic status off the people. >> you think there is good government, that there's rising standards of living, it makes it less likely that these young boys, mostly boy, go into radical movements, go into jihady movements? >> yes, with one caveat, that you do have to ensure the proper teaching of islam. you know, i keep on saying, being moderate is fundamental to islam. but once in a while we do have extremists in our midst, whether they are in malaysia or they
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come from neighboring country and we have to deal with it. and fortunately, our security agencies, they're very, very good at this in taking preemptive actions, using the internal security act which has to detain people without trial, but it's not such a sort of onerous kind of punishment. you know, we detain you, you know, we try to reeducate you, and if you accept that islam is inherently moderate and you shouldn't resort to violence and extremism, then you're released back to society. >> as the leader of a muslim majority country, one very supportive of the united states over the years, do you think that the united states is pursuing the war on terror in the proper way?
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initially, no. i mean, we were quite frank about it. you know, you cannot form extremism into submission. it's about a mixture of the heart and soft power, if you like, of the united states, which eventually would win them more support in a muslim world than using the military approach. >> what do you make of this controversy over the building of an islamic center and mosque two blocks from ground zero? do you think that this controversy as weakened america's image in the muslim world? >> it has because it's a sense of, you know, this phenomena, so-called islam phobia, the a real concern to the muslim world. muslim have a sense they're not so welcome and they feel that is a change in the attitude of
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americans to muslim and it's important for us, you know, to get back on track. >> prime minister, a pleasure to have you on. >> thank you. thank you. we will be back. tdd# 1-800-345-2550 seriously, letting myself get sold into all these investments tdd# 1-800-345-2550 that i didn't even understand -- i was so naive. tdd# 1-800-345-2550 i mean, i still need help. tdd# 1-800-345-2550 but not from some guy that's just going to sell me stuff. tdd# 1-800-345-2550 i need somebody who works with me, tdd# 1-800-345-2550 speaks a language i understand, tdd# 1-800-345-2550 and basically helps me make better decisions. tdd# 1-800-345-2550 maybe i'm still being naive? tdd# 1-800-345-2550 [ male announcer ] no hard sell. tdd# 1-800-345-2550 no attitude. tdd# 1-800-345-2550 no broker-speak. tdd# 1-800-345-2550 it's different when you talk to chuck. tdd# 1-800-345-2550 ♪
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our question of the week from the gps challenge is, president obama might have had a rough week. but it looks like one american educated president of an african country had a rougher one. dismissing the entire presidential cabinet.
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who is it? a, goodluck jonathan, b, joseph kabila, c, james monroe, d, ellen johnson sirleaf. stay tuned. we'll tell you the correct answer. go to cnn.com/gps for ten more challenging questions. while there, do not forget to sign up for our weekly podcast. that way you'll never miss a show, and it is free. this week's book is "right nation" by john mickletait. i thought it was a very appropriate book for the week because it explores america's shift to the political right over the past half century. they capture the hows and whys of the huge sea change in american politics. is wonderfully written, intelligent and assessable. if you think this countries a center-right nation, read it. if you don't, see what they have to say. for the last look.
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what if i told you that a nation could add billions of dollars to its piggy bank just turning back time? i'm not talking about getting into a time machine and cleverly managing to avoid the financial crisis of 2007. talking about what most of you americans have just done, you've turned back the clock one hour. more than 70 nations do the same thing. but japan doesn't. and studies have shown that if japan started changing its clocks, it would encourage more leisure activity within the extra hour of sun in summertime. and that would mean more time spent in restaurants, bars, on golf courses, and shopping. the studies say japan could add $15 billion to its gdp, and 100,000 jobs to payrolls just by doing what the rest of the world already does. so rather than complaining about losing an hour of sleep, maybe rest of us ought to look on the bright side -- go shopping. for this week's gps challenge question we asked you which american educated president